Life Living Benefits ABR riders Anico

1. Accelerated Benefit Riders
Life
When You Need It!
One Moody Plaza
Galveston, TX 77550
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2. TOPICS
 What are the ANICO Accelerated Benefit
Riders?
 How Will These Living Benefits Work?
 Case Studies
 Benefits to Client
 Underwriting Express
 Conclusion
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3. Accelerated Benefit Riders




Life, When You Need It!
LIVING BENEFITS – more options for your clients
A new product advantage to offer your clients
Another way along with Underwriting Express to
differentiate our products in the field from the
competition
 Another reason to buy a permanent life insurance
policy from ANICO
 And best of all, NO ADDITIONAL PREMIUM for this
rider to the customer
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4. Accelerated Benefit Riders

Provides for the payment of an accelerated benefit!

Lump-Sum Payment / Not required to take in installments

Up to 16 qualifying Critical Illnesses* - More than the
competition!

Requires inability to perform only two of six daily living
activities to qualify for Chronic Illness

ANICO provides Living Benefits at NO additional
Premium!
*Critical Illness Rider not available in all states
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5. Accelerated Benefit Riders
 Accelerated Benefit Riders are not Long Term Care
Insurance
 Majority of Americans do not buy or cannot afford Long Term
Care Insurance
 Cost of Long Term Care Insurance is very expensive and
may not be needed
 Accelerated Benefit Riders may enable consumer with
qualifying condition to receive a discounted accelerated
benefit in lieu of the full death benefit for liquidity to cover
expenses of Terminal, Chronic and Critical Illness
 No Additional Premium: Benefits When You Need Them!!
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6. Accelerated Benefit Riders
 A study by Harvard conducted in 2007 and published in
The American Journal of Medicine* in 2009 found in a
survey of 2,314 Americans in Bankruptcy in 2007, that
62.1% were related to medical debts.
 The ANICO Accelerated Benefit Riders provide a
discounted accelerated death benefit in the event of a
Qualified Terminal, Chronic or Critical Illness when it is
needed most.
*Volume 122, Issue 8, Pages 741-746, August 2009; Austin David Himmelstein
and Deborah Thorne, Elizabeth Warren and Stephie Woodhandler
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7. Accelerated Benefit Riders
ANICO Indexed Universal Life*
Affinity 7 Whole Life Insurance
ANICO Executive Universal Life
*The ANICO Indexed Universal Life Insurance policy is not a registered security or
stock market investment and does not directly participate in any stock or equity
investment or index. When an individual purchases the policy, the individual is not
buying an ownership interest in any stock or index
Form IUL08, Form IULU08, Form PWL-CSO, Form PWLU-CSO, Form EXEC-UL, Form EXEC-ULU
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8. Accelerated Benefit Riders
(Form ABR11-CH)
 Insured
is unable to perform 2 of 6 activities of
daily living (ADLs) or requires supervision due
to severe cognitive impairment
 The

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Activities of Daily Living are:
Bathing, continence, dressing, eating, toileting and
transferring
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9. Accelerated Benefit Riders
(Form ABR11-CT)



Triggered by a specific qualifying
health event where critical illness
transpires
Most of the competition only
covers 6 triggers
Covered Critical Illnesses may
include:







Heart Attack
Stroke
Invasive Cancer
End stage renal failure
Major organ transplant
ALS
Blindness
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
Covered critical illnesses continued:









Paralysis
Arterial aneurysms
Central nervous system disease
Central nervous system tumors
AIDS
Major burns
Major Multi-system trauma
Severe disease of any organ
Loss of limbs
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10. Accelerated Benefit Rider
(Form ABR11-TM)

Life expectancy of less than 24* months


Some states may limit the definition of terminal illness to
conditions that are expected to result in death within 12
months
Available on all classes
 Terminal Illnesses can cost an incredible amount of
money and cause stress and worry for those involved
 Sometimes having money during life to meet health care
costs to make loved ones more comfortable or give
them hope is more important than having a death
benefit later
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11. Accelerated Benefit Riders
 Use of any Accelerated Benefit Rider will
terminate the life insurance policy unless the
benefit accelerated is under a spousal term or
other insured rider, in which case the rider will
terminate
– Partial Settlements Coming the first quarter of 2014.
 For Chronic and Critical Illnesses, Accelerated
Benefit Rider is not allowed on policies rated
higher than table 4 or if there is a flat extra of
more than $5.00 per thousand.
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12. Accelerated Benefit Riders

Minimum



$25,000 for Terminal Illness version
$50,000 for Chronic and Critical Illness version
Maximum


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$2,000,000 for ages 0-65
$1,000,000 for over age 65
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13. Accelerated Benefit Riders
 Added
automatically to newly issued policies
 Some
states may approve all riders; some states
such as New York may approve only Terminal
Illness Rider
 check
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individual states for approval
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14. Accelerated Benefit Riders
 Enhance attractiveness of our product in the
Buy/Sell Market
 Using full funding, the base policy cash
value builds to assist Buyout at retirement
 Accelerated Benefit Riders can be used as a
buy-out down payment in the event of a
qualifying Critical, Chronic or Terminal
illness
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15. Accelerated Benefit Riders
 Additional Qualifying Riders

Primary Insured – Added to base policy death benefit when
electing accelerated benefit amount for primary insured


Additional Protection Benefit Rider (Form ULAPBR08)

Paid Up Additions Rider (Form MLPUA)


Level Term Rider (Form ULLTR)
ANICO Select Term Rider (Form ART07 –TERM)
Other Insured Parties – eligible for accelerated benefits if
the other Insured has qualifying condition


Other Insured Rider (Form ULOIR)
Spouse Term Rider (Form ULSTR93, Form SARTR94, Form STR88)
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16. Accelerated Benefit Riders
Eligible Death Benefit reduced by
-Actuarial Discount
-Administrative Fee (
-Less Outstanding Policy Debt
= Accelerated Benefit Amount
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)
Loans reduce
BUT DO NOT
Eliminate
Benefits;

17. Accelerated Benefit Riders
 Actuarial discount computed to make accelerated benefit
amount equivalent to present value of eligible death
benefit less the present value of future premiums required
to keep the policy in force
 Factors Impacting Benefit Amount:

Accelerated Benefit Interest Rate

Severity of Qualifying Medical Condition

Future Premiums

Future Anticipated Dividends

Cash Value Associated with Eligible Death Benefit
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18. Accelerated Benefit Rider
 Payment Options
 Accelerated
Benefit paid in a lump sum
may be applied to any non-life
contingent settlement option available in the
contract
 If insured for whom accelerated benefits are
paid is insured under policy, policy will
terminate
 If
insured for whom accelerated benefits are
paid is not insured under base policy, then
policy remains in effect with rider terminated
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19. Accelerated Benefit Rider
 Waiting Period
- None
–

Condition must exist for 90 days prior to a claim (does not
apply to cognitive impairment)

No accelerated benefit will be paid within the first two policy
years of the issue date of the base policy
–


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Claims will not be processed until at least 30 days after the
qualifying event
No accelerated benefit will be paid for any qualifying event
that occurs on or before the issue date of the base policy
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20. Tax Consequences
should be Non Taxable
distribution may receive favorable
tax treatment as it is subject to daily limit of $320 or
$116,800 annually for 2013 or amount of qualified longterm care expenses. All insurance benefits are
considered in evaluating these limits.
 Payments received under
may be
excluded under accidental health policy and IRC Section
105(b) and 105(c) (check with advisors)
 Clients should consult their tax and legal advisors to
determine applicability to their individual situation
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21. Accelerated Benefit Riders
 Effect on Eligibility for Government
Benefits
 Qualification
for Government programs such
as Medicaid are quite stringent and often allow
for only limited income and assets in order to
receive benefits
 Client
should consult their legal and tax
advisors to determine the impact of receipt of
benefits on their individual situation before
deciding to accept such benefits
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22. Accelerated Benefit Rider
 Illustration Support
 Accelerated
Benefit Rider Illustrations will follow
the policy under Riders
 Report
will provide an illustration for Terminal,
Chronic and Critical Illness at various attained
ages
 Report
will reflect hypothetical amount available
based upon slight impairment, moderate
impairment and severe impairment for Chronic
and Critical and amount for terminal illness
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23. Hypothetical Accelerated Benefits
ANICO Indexed Universal Life, Face Amount: $100,000, 45 Year old Female
Standard non-user, Annual Premium $3,347.00
Chronic and Critical Illness
Attained Age
Slight
Impairment
Moderate
Impairment
Severe
Impairment
Terminal
Illness
47
$38,222
$76,444
$88,186
65
$20,238
$48,341
$76,444
$88,186
75
$39,216
$57,830
$76,445
$88,186
85
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$0
$59,272
$67,867
$76,461
$88,186
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24. ABRs for Signature Term Insurance
 ANICO’s Signature Term Insurance Policy also
contains the three Accelerated Benefit Riders
 Benefits may not be as large as IUL Benefit unless
Illness is severe
 Slight and moderate benefits will be reduced by
lack of cash value and reduction in benefit due to
ART premiums at higher ages being a part of
discounting calculation
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25. Terminal Illness –
Hypothetical Case Study
 After visiting her Doctor, Joan found out she had pancreatic cancer.
She went to a leading Cancer Center and had her diagnosis confirmed
 Joan could not work once treatment started and began going through
her savings very rapidly.
 Joan visited with her financial advisor to see what she could get if she
surrendered the policy and found she could access a larger amount
through the Accelerated Benefit Terminal Illness Rider
 Joan exercised the rider in settlement of her policy
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26. Terminal Illness –
Hypothetical Case Study
 With this money, Joan was able to afford to continue her
treatment and lived longer than expected
 The money brought Joan hope that she could beat this
devastating disease and become one of the few survivors
 Although she did not survive the disease, she lived a
longer and better life due to the assistance this living
benefit provided her
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27. Chronic Illness –
Hypothetical Case Study
 Karen became concerned as her husband Bill began
experiencing forgetfulness and occasionally became
confused. This condition worsened over time
 They visited a doctor and learned that Bill had early-onset
Alzheimer’s disease. As time passed, the disease became
worse and Bill needed to stop working. Karen missed
work taking care of Bill
 This resulted in a loss of income and higher medical bills
as Bill was being treated
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28. Chronic Illness –
Hypothetical Case Study
 Bill and Karen quickly went through all of their savings and
much of their retirement savings to pay for treatment
 They met with their financial advisor to see what they had left
 Bill had an ANICO life insurance policy with a face of
$500,000 on his life
 They talked to their advisor about surrendering the policy and
were informed the policy had a living benefit that included
Chronic Illness
 They qualified and received a reduced lump sum acceleration
benefit in settlement of the policy which helped pay for Bill’s
treatment & caregivers which allowed Karen to return to work
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29. Critical Illness –
Hypothetical Case Study
 Jim and Mary were asleep one night when Jim woke up
experiencing a massive heart attack
 Jim was in ICU several days before eventually being sent
home to recover
 Jim would be unable to return to work for two months and
Mary took a temporary leave of absence to care for Jim
and help him get healthy and lose weight
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30. Critical Illness –
 Jim and Mary were concerned that
with Jim’s illness and recovery,
they would go through their regular
savings and much of their
retirement savings
Hypothetical Case Study
 Their financial advisor pointed out
that Jim’s ANICO Life Policy had a
Critical Illness Rider and they
could receive a discounted lump
sum in settlement for their policy
 At a time when their future
retirement seemed to be falling
apart, Jim and Mary found the
financial comfort they needed from
ANICO’s living benefits
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31. Accelerated Benefit Riders
 The check is not a reimbursement for approved
expenses already incurred
 Lump Sum discounted accelerated benefit can be
used without restrictions
 Pay
a family member to take care of you
 Have
the lawn mowed or the house cleaned
 Funds
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to get you through the tough times
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32. Accelerated Benefit Riders
 ANICO’s Accelerated Benefit Riders can provide a client
living benefits that they can use when they need them
 Selling life insurance for more than protecting against
premature death is critical to making the sale
 Our living benefits rider joins other features such as (1)
supplemental retirement income, (2) paying off a home
prior to retirement, (3) educating grandchildren, etc. to
provide our clients a number of benefits they may enjoy
while they are alive
 ANICO has multiple Life Insurance product attributes
that differentiate us from the competition
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33. The ANICO Underwriting Express
 Another product attribute that ANICO provides is
The ANICO Underwriting Express
 Underwriting Express allows for fast easy
underwriting along with the Living Benefit Riders
 With the ANICO Underwriting Express, Most
Cases Allow for:

No Labs

No Parameds

No Blood work
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34. The ANICO Underwriting Express
 Underwriting Express applies to ages 0-65 with amounts
up to $250,000
 Standard and Substandard rate classes only.
 Preferred rates and full underwriting available with other ANICO products
or on amounts over $250,000
 No Reduction in Commissions
 Underwriting becomes faster and less invasive for most
individuals
 Applications that meet our guidelines usually approved
within 72 hours
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35. Conclusion
 ANICO’s Living Benefits Riders help protect against life’s risks
 No one expects life threatening events but we can plan for them
 One way to protect from catastrophic health events is the
ANICO Accelerated Benefit Riders
 Some other companies may charge a premium for a Living
Benefit that may never be utilized
 ANICO offers Protection for NO ADDITIONAL PREMIUM
 If an insured qualifies, they can receive a discounted lump sum
death benefit when they need it to get through their illness
If the
DB grows after issue, then the ABR Benefit will be calculated on
the DB at time of claim (
.)
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36. Conclusion
 Give your clients more reasons to buy life
insurance that can benefit them
 Then provide your clients an improved,
less invasive underwriting experience with
The ANICO Underwriting Express
 American National Insurance Company:
 More
client living benefits
 Easier, faster and painless underwriting
 Less of your time required to finalize the sale
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37. Any Questions?
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